AI Takeaway
Prologis (PLD) delivered 7.2% revenue growth to $8.79B in FY2025, but net income declined 10.8% to $3.33B as rising interest costs and higher liabilities weighed on profitability despite strong operating cash flow of $5.01B.
Revenue
$8.79B
++7.18% YoY
EPS (Basic)
$3.58
-10.95% YoY
Operating Income
$4.36B
-1.31% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue grew 7.2% year-over-year from $8.20B to $8.79B in FY2025, reflecting continued demand for Prologis's industrial and logistics real estate portfolio, even as macroeconomic conditions created headwinds for margin expansion.
Source: Source: 10-K Income Statement, FY2025
Operating margin declined approximately 4.3 percentage points to 49.6% from 53.8% in the prior year, suggesting that revenue growth was outpaced by rising operating costs, including depreciation, property expenses, and general & administrative costs associated with portfolio expansion.
Source: Source: 10-K Income Statement & Key Ratios, FY2025
Net income fell 10.8% to $3.33B from $3.73B, with long-term debt rising 13.5% to $35.04B, implying significantly higher interest expense that compressed net margins from the operating level down to 37.9%.
Source: Source: 10-K Income Statement & Balance Sheet, FY2025
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Upgrade to unlockLong-term debt increased 13.5% to $35.04B in FY2025, significantly increasing Prologis's sensitivity to interest rate movements. Higher borrowing costs have already contributed to the 10.8% decline in net income despite revenue growth, and further rate increases could further compress earnings.
Source: Source: 10-K Balance Sheet, FY2025
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Upgrade to unlockReported EPS of $1.49 versus the $0.68 analyst consensus — a +117.6% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $8.79B | $8.2B | +7.18% |
Operating Income | $4.36B | $4.42B | -1.31% |
Net Income | $3.33B | $3.73B | -10.81% |
EPS (Basic) | $3.58 | $4.02 | -10.95% |
EPS (Diluted) | $3.56 | $4.01 | -11.22% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $98.72B | $95.33B | +3.56% |
Total Liabilities | $40.97B | $36.71B | +11.60% |
Stockholders' Equity | $53.19B | $53.95B | -1.40% |
Cash & Equivalents | $1.15B | $1.32B | -13.12% |
Long-Term Debt | $35.04B | $30.88B | +13.46% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $5.01B | $4.91B | +1.96% |
Investing Cash Flow | $-3.63B | $-3.1B | -17.15% |
Financing Cash Flow | $-1.56B | $-999.96M | -56.37% |
Dividends Paid | $3.76B | $3.57B | +5.44% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 49.6% | 53.8% | -4.27% |
Net Margin | 37.9% | — | — |
ROE | 6.3% | — | — |
ROA | 3.4% | — | — |
Debt to Equity | $0.77 | — | — |
Prologis reported FY2025 revenue of $8.79B, up 7.2% year-over-year, but net income declined 10.8% to $3.33B due to higher interest costs from a 13.5% increase in long-term debt. Operating cash flow remained strong at $5.01B, supporting the company's $3.76B dividend payment.
PLD's net income fell 10.8% to $3.33B in FY2025 primarily because long-term debt grew 13.5% to $35.04B, significantly increasing interest expense and compressing net margins. Operating margin also contracted by 4.3 percentage points to 49.6%, indicating rising operating costs outpaced revenue growth.
Prologis paid $3.76B in dividends in FY2025, which exceeded its GAAP net income of $3.33B, but operating cash flow of $5.01B comfortably covered the payout. As a REIT, Prologis is evaluated on cash flow rather than GAAP earnings, and the 2.0% growth in operating cash flow suggests the dividend remains well-supported for now.
The most significant risks for Prologis heading into FY2026 include rising interest costs on its $35.04B long-term debt load, continued operating margin compression (down to 49.6% in FY2025), and a declining cash balance of $1.15B that limits financial flexibility. Increasing leverage, with total liabilities up 11.6% to $40.97B, also reduces the company's buffer against a potential slowdown in industrial real estate demand.
As of FY2025, Prologis carries $35.04B in long-term debt, up 13.5% from the prior year, with a debt-to-equity ratio of 0.77. While this level of leverage is common for large REITs, the rapid pace of debt accumulation combined with declining net income and a thin $1.15B cash balance warrants monitoring by investors.